LXP(LXP) - 2024 Q1 - Quarterly Report

PART I. — FINANCIAL INFORMATION Financial Statements (Unaudited) The unaudited Q1 2024 financial statements report a net loss of $0.56 million, a shift from prior-year net income, with total assets at $4.16 billion Condensed Consolidated Balance Sheets As of March 31, 2024, total assets slightly decreased to $4.16 billion, total liabilities marginally increased to $1.94 billion, and total equity decreased to $2.22 billion Condensed Consolidated Balance Sheet Summary (in thousands) | Account | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Total Assets | $4,156,368 | $4,192,775 | | Real estate, net | $3,560,590 | $3,584,153 | | Cash and cash equivalents | $163,213 | $199,247 | | Total Liabilities | $1,935,854 | $1,927,318 | | Senior notes payable, net | $1,286,711 | $1,286,145 | | Total Equity | $2,220,514 | $2,265,457 | Condensed Consolidated Statements of Operations The company reported a net loss attributable to common shareholders of $1.9 million for Q1 2024, a decline from prior-year net income due to the absence of property sale gains and higher interest expenses Statement of Operations Highlights (in thousands, except per share data) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Total gross revenues | $86,251 | $85,075 | | Gains on sales of properties | $0 | $7,879 | | Interest and amortization expense | $(16,984) | $(11,393) | | Net income (loss) | $(555) | $11,315 | | Net income (loss) attributable to common shareholders | $(1,931) | $9,522 | | Net income (loss) per common share - diluted | $(0.01) | $0.03 | Condensed Consolidated Statements of Comprehensive Income (Loss) The company recorded a comprehensive loss of $1.6 million for Q1 2024, primarily due to the net loss and an other comprehensive loss from interest rate swaps Comprehensive Income (Loss) Summary (in thousands) | Item | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net income (loss) | $(555) | $11,315 | | Other comprehensive loss | $(1,060) | $(3,520) | | Comprehensive income (loss) | $(1,615) | $7,795 | Condensed Consolidated Statements of Changes in Equity Total equity decreased to $2.22 billion as of March 31, 2024, driven by a net loss of $0.6 million and $39.6 million in common share dividends - Key changes in equity for Q1 2024 included a net loss of $0.56 million, dividend payments of $39.6 million, and an other comprehensive loss of $1.1 million, contributing to the overall decrease in total equity[19] Condensed Consolidated Statements of Cash Flows Q1 2024 saw $38.9 million in operating cash flow, $27.7 million used in investing, and $47.2 million used in financing, resulting in a $36.0 million net decrease in cash Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $38,916 | $37,546 | | Net cash used in investing activities | $(27,696) | $(5,529) | | Net cash used in financing activities | $(47,248) | $(43,480) | | Change in cash, cash equivalents and restricted cash | $(36,028) | $(11,463) | Notes to Condensed Consolidated Financial Statements The notes detail the company's REIT focus on 118 industrial properties, real estate investments, debt structure, leasing activities, and compensation plans - As of March 31, 2024, the company owned interests in approximately 118 consolidated real estate properties, primarily single-tenant industrial facilities, located in 18 states[23] - In Q1 2024, the company placed three warehouse/distribution facilities in service, totaling approximately 2.6 million square feet; ongoing development projects have an aggregate estimated cost of $215.0 million[39][41] - The company has an unsecured credit agreement consisting of a $600 million revolving credit facility (undrawn as of March 31, 2024) and a $300 million term loan; the term loan's variable rate is swapped to a fixed rate of 2.722% until January 2025[61][62] - Future fixed rental receipts for operating and sales-type leases as of March 31, 2024, total approximately $1.67 billion and $760 million, respectively[83] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the 95.3% leased portfolio, noting a $11.5 million net income decrease due to property sale gains and higher interest, while same-store NOI grew 6.4% and FFO per share slightly declined - As of March 31, 2024, the company's portfolio of 118 properties, totaling 57.3 million square feet, was 95.3% leased[123] - The decrease in net income was primarily due to a $7.9 million decrease in gains on property sales, a $5.6 million increase in interest and amortization expense, and a $4.9 million decrease in equity earnings from non-consolidated entities compared to the prior year[145][149][150] - Same-store Net Operating Income (NOI) increased by 6.4% for Q1 2024 compared to Q1 2023, driven primarily by an increase in cash base rents[152] FFO and Adjusted Company FFO per Share | Metric (per share) | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | FFO - Diluted | $0.16 | $0.17 | | Adjusted Company FFO - Diluted | $0.16 | $0.17 | Quantitative and Qualitative Disclosures About Market Risk The company's primary market risk is interest rate fluctuations on its $129.1 million unhedged variable-rate debt, mitigated by fixed-rate debt and interest rate swaps - At March 31, 2024, consolidated variable-rate indebtedness not subject to interest rate swaps was $129.1 million, representing 7.2% of total consolidated debt[167] - A 100 basis point increase in the weighted-average interest rate would have increased interest expense by approximately $0.3 million for the three months ended March 31, 2024[167] - The company utilizes interest rate swaps to manage risk on its variable-rate debt, with four such agreements in place as of the quarter's end[169] Controls and Procedures Management concluded that disclosure controls and procedures were effective as of March 31, 2024, with no material changes to internal control over financial reporting - Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2024[171] - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[172] PART II — OTHER INFORMATION Legal Proceedings The company is involved in ordinary course legal proceedings, which management does not expect to materially affect financial condition or operations - The company is involved in legal proceedings arising in the ordinary course of business, but management does not expect them to have a material adverse effect[174] Risk Factors No material changes to previously disclosed risk factors were reported - No material changes in risk factors were reported compared to those disclosed in the Annual Report[175] Unregistered Sales of Equity Securities and Use of Proceeds The company did not repurchase common shares in Q1 2024, with 6,874,241 shares remaining available under the existing plan Share Repurchase Activity - Q1 2024 | Period | Total Number of Shares Purchased | Maximum Number of Shares That May Yet Be Purchased | | :--- | :--- | :--- | | January 2024 | 0 | 6,874,241 | | February 2024 | 0 | 6,874,241 | | March 2024 | 0 | 6,874,241 | Defaults Upon Senior Securities This item is not applicable for the reporting period - Not applicable[177] Mine Safety Disclosures This item is not applicable for the reporting period - Not applicable[178] Other Information No trustee or officer adopted or terminated a Rule 10b5-1 trading arrangement during Q1 2024 - No officer or trustee adopted or terminated a Rule 10b5-1 trading arrangement during the quarter[179] Exhibits This section lists all exhibits filed with the Form 10-Q, including corporate governance documents, debt agreements, and required CEO and CFO certifications - The report includes certifications from the CEO and CFO pursuant to Section 302 and Section 906 of the Sarbanes-Oxley Act of 2002[182]